Junda, the leading cell company, is about to be listed for the second time.
Huaxia Energy Network learned that recently, Hainan Junda New Energy Technology Co., Ltd. (hereinafter referred to as "Junda Shares", SZ: 002865) has submitted a listing application to the Hong Kong Stock Exchange. This means that Junda may become the first PV cell manufacturer to be listed on A+H.
As of the Spring Festival holiday, before the market closed, on February 8, Junda's share price closed at 5813 yuan, with a total market value of 13.2 billion yuan; According to the ratings given by a number of institutions in the past 90 days, ** rated 5 and overweight rated 3.
According to Junda's previous announcement, the funds raised from the IPO of Hong Kong listing will be used for the construction of overseas production capacity of high-efficiency batteries, overseas market expansion and overseas sales operation system, the construction of global R&D centers and the replenishment of working capital.
Junda is a typical cross-border player in the photovoltaic industry, as early as 2021, it opened the road of cross-border photovoltaic, and directly increased the cell link with a certain threshold, bet on the topcon technology route, fortunately stepped on the tuyere of battery technology from p-type to n-type iteration, and became one of the leading cell companies in one year of transformation, and also enjoyed the dividends of the outbreak of the topcon market. Compared with the cross-border players in the same period, the road to transformation is relatively smooth.
At present, Junda has also laid out its international business, why does it adhere to the strategy of going overseas? What are the odds of winning in the current cutthroat industry competition?
Bet on Topcon to become the most successful "crossover".
Junda Co., Ltd. was established in Hainan in 2003, the main business in the early stage is auto parts and interiors, relying on Haima, Lifan, Cheetah and other automobile brands to do the best business, the company's business took off rapidly, and in 2017 successfully listed. However, affected by the operating difficulties of downstream car companies, Junda's net profit did not increase from 2016 to 2020, basically maintained at about 800 million yuan, and by 2021, it also lost 17.9 billion yuan.
In order to reverse the business difficulties, Junda started a business transformation. In 2021-2022, Junda made two transactions to a total of 29The 5.3 billion yuan company completed 100% of the solar cell manufacturer Jietai Technology, and at the same time divested or impaired the original automotive trim and parts business, thus realizing a comprehensive transformation to a professional solar cell manufacturer.
Junda's cross-border transformation has caught up with the best year of PV. Taking advantage of the industry's upward cycle, in 2022, the solar cell business contributed 11.1 billion yuan in revenue, accounting for 95% of the total revenue74%；Junda also turned losses into profits in one fell swoop, with a net profit attributable to listed companies of 71.7 billion yuan.
At the same time, Junda Co., Ltd. keenly grasped the technical trend that the industry is about to face from P-type to N-type iteration, and began to fully bet on the TOPCON technology route as early as 2021, when the market share of N-type batteries is only 3%. In September 2022, Junda became the first professional cell manufacturer to achieve large-scale mass production of N-type TOPCON cells. At present, its TOPCon planned production capacity has reached 68GW.
The production capacity of the projects invested and constructed by Junda Co., Ltd. (**Company announcement).
According to the prospectus, by December 2023, Junda's annual production capacity of photovoltaic cells will be about 50 GW, of which the annual production capacity of N-type TOPCon cells will be about 40 GW. This means that the production capacity of TOPCon accounts for 80%, which is higher than Jinko's 75%, so Junda is also known as "Little Jinko" in the industry.
In November of the same year, Junda Co., Ltd. released a new generation of TOPCON battery Mono series products, and the battery conversion efficiency has risen to more than 26%, which is at the leading level in the industry.
In 2023, as TOPCon cells begin to occupy the P-type market on a large scale, Junda's production capacity advantage will be highlighted. In the first three quarters, Topcon products contributed 97revenue of 5.1 billion yuan, accounting for 68% of total revenue; In the first half of the year 11Of the 4GW battery shipments, TOPCon batteries accounted for 656gw。
It was also disclosed in the prospectus that Junda's global market share in TOPCon batteries reached 57 in the first half of 20234%, "ranked first", has become the champion of TOPCon battery shipments. In 2023, Junda's N-type battery shipments are expected to reach more than 20GW.
In the first three quarters of 2023, Junda's revenue was 143400 million yuan, net profit 16400 million yuan, and the profit increased nearly three times year-on-year.
2023 cell shipment ranking (InfoLink ranking chart).
According to InfoLink's latest survey, in the annual cell shipment ranking, Jietai Technology (Junda) will rise from fifth in the previous year to fourth in 2023.
Another subdivision leader with a layout to go to sea
In order to adapt to the development trend of the global photovoltaic industry and meet the needs of customers in the global market, the company plans to lay out overseas production capacity, promote the internationalization strategy, build an international capital operation platform, and enhance the international brand image and comprehensive competitiveness. "After transforming into a cell leader, Junda will set its sights on overseas markets in 2023.
The third quarter report shows that in 2023, Junda will achieve overseas sales from 0 to 466% growth, the company's overseas markets mainly include Asia, Europe and other places; At the same time, it is actively completing customer certification in emerging markets such as North America, Latin America, and Australia.
Of course, compared with the 40%-60% overseas business proportion of vertically integrated leaders such as LONGi, Jinko, Trina, and JA Solar, there is still huge room for improvement in the above progress.
Also in the same year, more than 30 photovoltaic companies set off a boom in going overseas, among which Trina Solar (SH:688599), JA Solar (SZ:002459), LONGi (SH:601012), Canadian Solar (SH:688472), TCL Zhonghuan (SZ:002129), and Haoneng Optoelectronics announced that they would build factories in the United States. TCL Zhonghuan (SZ:002129) and GCL Technology (HK:03800) also announced the establishment of polysilicon and wafer factories in the Middle East.
Compared with the serious involution of the domestic cell sales market, the overseas market has higher profits and huge volume. According to the industry**, the overseas market will remain 234% CAGR. However, entering the overseas market is also facing the test of the best barriers. Therefore, in line with the general trend of supporting the local industrial chain in various countries, it has become an inevitable choice for these photovoltaic companies to build factories overseas.
In the overseas business layout of many leading enterprises, the main industrial chain is mostly concentrated in the component link. From the perspective of 2022, due to the outbreak of the European power crisis in the first half of the year, the photovoltaic modules of the six leading manufacturers are exported to Europe to support profits. According to data released by the China Photovoltaic Association, in the first half of 2022, China's exports totaled 787GW of photovoltaic modules, a considerable year-on-year increase.
In the cell sector, only Canadian Solar and Aiko (SH:600732) have clear plans to go overseas. Among them, Canadian Solar will build a 5GW N-type cell factory in Indiana, USA, by the end of 2025 to build its own module production base in the United States. Aiko is planning to achieve the landing of one overseas production base in the next two years.
As a professional manufacturer that has not yet developed vertically integrated, how can Junda take a share of the overseas market?
Zheng Hongwei, deputy general manager of Junda, said at the investor exchange meeting on January 19, 2024 that at present, the growth rate of overseas photovoltaic installed capacity has exceeded that of the domestic market.
According to the prospectus, Junda plans to achieve an overseas annual production capacity of about 14 GW in the future, which will be completed in two phases.
The overseas market is undergoing rapid iteration from p-type to n-type, and n-type batteries are the future of the global market. A person in charge of Junda shares once revealed to ** that the target areas of overseas production capacity are the Middle East, Southeast Asia, Europe and the United States, "the company will work with external partners to achieve overseas production capacity." ”
The "debt" of the transformation photovoltaic has to be repaid
Whether it is further expansion or international layout, the required capital will not be in the decimal number, so alleviating its cash flow pressure through overseas and listing in Hong Kong may be one of the reasons that drives Junda to step up its listing in Hong Kong.
Although Junda has successfully transformed into photovoltaics, in the context of the photovoltaic industry entering the adjustment stage, the business pressure is not small.
Perhaps the company's biggest challenge at the moment is debt stress. In the final analysis, this is still the "debt" of the transformation of PV.
At the beginning, in order to acquire Jietai Technology, Junda shares paid a total of 29$5.3 billion in cash. Before the acquisition, the total assets of Junda shares in 2020 were only 185.8 billion yuan, minus 8100 million yuan of liabilities, net assets of only 104.8 billion yuan. This means that the acquisition of Jietai alone, Junda borrowed about 1.9 billion yuan.
From 2021 to June 2023, a total of 403 billion yuan. It means that in order to transform photovoltaics, Junda borrowed at least 59300 million yuan. According to the prospectus, in 2022, when 100% of Jietai Technology is completed, Junda's asset-liability ratio will reach 881%。
Under the pressure of debt, how to pay for the acquisition of 49% of the equity of Jietai Technology and the maturity of some bank loans has become a problem, but fortunately, in June 2023, Junda raised 273.8 billion funds to solve the urgent need. By the end of the third quarter of 2023, its debt-to-asset ratio had dropped to 72%.
However, the expansion of production capacity will still put Junda under pressure on cash flow and debt repayment in the future.
As of the end of the third quarter of 2023, the net cash flow from operating activities of Junda Co., Ltd. was 47.5 billion yuan, but the free cash flow outflow reached 211.3 billion yuan cannot cover the capital needs. In addition, there was a sum of 43 on the books during the same periodThe long-term payables of 2.8 billion yuan are the first construction funds payable for new projects. The problem of "arrears" everywhere urgently needs relatively sufficient funds to solve it.
From the perspective of peer competition, Junda's competitive advantage is also being challenged.
In 2023, the photovoltaic cell sector will be greatly expanded, and the total annual production capacity** will be as high as 11514GW, TopCon is the biggest expansion force among them. Third-party research institutions**, the market share of n-type products is expected to reach 70% or even higher in 2024. In this context, Junda's first-mover advantage in betting on the topcon technology route is bound to weaken.
Specialized enterprises that survive in the "cracks" among vertically integrated giants are particularly challenged in terms of profits and performance. As Junda's revenue is heavily dependent on downstream module giants such as Jinko and JA Solar, its top customers are highly concentrated. According to its prospectus, in the first three quarters of 2023, the sales of Junda's top five customers accounted for 494%, of which the sales of the largest customer accounted for 259%。
The prospectus also mentions the corresponding risk warning: if we cannot win in the competition, "our business will suffer losses and may not be able to maintain or increase market share." ”
Layout to go overseas and alleviate financial pressure, or the logic of Junda seeking a secondary listing instead of raising funds in A-shares. However, when the industry is in an upward cycle, debt pressure may be delayed, and once the industry enters a downturn or adjustment, the competition for photovoltaic cell market share will become more and more cruel, which will also be a reality that Junda will face.
*Please indicate the source, article**: Huaxia Energy Network, **hxny3060).